1.3. Accounting for non-current assets
A subsection of Accounting, 9706, through 1. Financial accounting (AS Level)
Listing 10 of 480 questions
A business prepared its statement of profit or loss for the year ended 31 December. During that year, on 30 April, a non-current asset had been sold. The following information is available in respect of this item. cost $130 000 sale proceeds $53 500 residual value $10 000 carrying value at 1 January $52 500 expected life 8 years Non-current assets are depreciated using the straight-line method, with depreciation being charged for each month of ownership. No accounting entries had been made in respect of this non-current asset for the year ended 31 December. What was the effect of this omission on the profit for the year?
9706_w23_qp_12
MCQ
2023
Paper 1, Variant 2
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Laila, a retailer, did not maintain a full set of accounting records for her business. She has provided the following information for the year ended 30 September 2023. Balances at 1 October 2022 $ Inventory 12 030 Non-current assets at carrying value 22 180 Other payables: light and heat Other receivables: insurance Trade payables 3 840 Trade receivables 4 540 Summary of bank account for the year ended 30 September 2023 $ $ Receipts: trade receivables 55 390 Balance b/d 1 220 Sale of non-current assets Payments: trade payables 46 280 Balance c/d 1 170 Insurance 2 560 Light and heat 3 510 Drawings 3 850 57 420 57 420 Balance b/d 1 170 The following information is also available at 30 September 2023. Laila has started to prepare her financial statements for the year ended 30 September 2023. The following figures are available to transfer to the statement of profit or loss with no adjustment. $ Insurance 2 720 Light and heat 3 880 Loss on disposal of non-current asset All sales are made at a mark-up of 25%. All sales and purchases are made on credit. The balance of trade receivables at 30 September 2023 was $3650. There were no additions to non-current assets during the year. All non-current assets are to be depreciated at 10% per annum using the reducing balance method. Laila was unable to physically count the inventory at 30 September 2023. The inventory was valued at $14 400 on 4 October 2023. Between 1 October 2023 and 4 October 2023, Sales were $3400 and Purchases were $1850. Calculate the value of closing inventory at 30 September 2023. Prepare the statement of profit or loss for the year ended 30 September 2023. Use the space provided on page 4 to show your workings. Laila Statement of profit or loss for the year ended 30 September 2023 Workings: Prepare the statement of financial position at 30 September 2023. Workings: Equity at 1 October 2022 Other receivables Trade payables Other payables Additional information Laila wishes to expand the business and is considering forming a partnership with her friend. State four provisions of the Partnership Act 1890 that would apply in the absence of a partnership agreement. State three possible disadvantages to a business of maintaining a full set of accounting records.
9706_w23_qp_21
THEORY
2023
Paper 2, Variant 1
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King provided the following information for non-current assets at 1 April 2015. $ Property plant and machinery Land and buildings – cost 252 000 Plant and machinery – cost 123 000 Accumulated depreciation Buildings 21 000 Plant and machinery 49 000 During the year ended 31 March 2016, the following took place: Land was revalued to $202 500. It had originally cost $182 000. A machine was sold on 30 November 2015. It had a net book value on 1 April 2015 of $46 350 and an original cost of $76 200. A machine was purchased on 1 December 2015 at a cost of $62 850. The depreciation policy for non-current assets is as follows: Buildings 2% per annum using the straight-line method Plant and machinery 20% per annum using the reducing balance method Depreciation is charged on a month-by-month basis. REQUIRED Calculate the total depreciation charge for buildings for the year ended 31 March 2016. Calculate the total depreciation charge for plant and machinery for the year ended 31 March 2016. Prepare an extract from the statement of financial position at 31 March 2016 for non-current assets. King Extract from Statement of Financial Position at 31 March 2016 Accumulated Cost / Valuation Depreciation Net Book Value $ $ $ Workings: State three causes of depreciation.
9706_m17_qp_22
THEORY
2017
Paper 2, Variant 2
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Questions Discovered
480